Bruce Murphy
Murphy’s Law

How Scott McCallum Plans to Raise Your Taxes

By - Nov 24th, 2001 03:44 pm
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Sometime in the coming week, Gov. Scott McCallum will be meeting secretly with lobbyists in Minocqua, of all places, to discuss a plan to cut school spending and force property tax increases as a way to balance the state budget. McCallum has hired Morris Andrews as a consultant to work out the master plan. McCallum and Andrews already met once in Madison with a who’s who of capitol lobbyists, including representatives of the state realtors, Farm Bureau, Wisconsin Educational Association Council and the Wisconsin Manufacturers and Commerce.

It’s a classic case of strange bedfellows. Andrews, who ran the state teachers union for two decades until his retirement about five years ago, was considered the devil by most Republicans, but has suddenly become the consultant of choice for the GOP on education issues. Former Governor Tommy Thompson hired Andrews several years ago to study the Milwaukee Public Schools and create a master plan for how to improve MPS. The plan died almost the minute it was announced, and was an embarrassment for all concerned.

Last spring, Andrews joined Republicans who were promoting Jonathan Barry for state Superintendent of Public Instruction. Barry didn’t even get beyond the primary. Now Andrews is getting paid by through the state Department of Administration, presumably with the thought he can broker a settlement that WEAC and the Republicans can agree on to cut the state’s commitment to fund two-thirds of public school costs, and force school districts to rely more heavily on property taxes and local sales taxes.

The solution would reportedly end the “revenue caps” on school districts and eliminate the “qualified economic offer,” which puts a constraint on how much wages and benefits teachers can win in negotiations. Until recently, such a proposal has been anathema to Republicans, who have long argued the school spending and teacher salaries were out of hand.

Then there are the state realtors, until recently a reliable friend of the Republicans. In recent years, they have been falling in line more with WEAC. The very fact that the Governor has decided the realtors and the Farm Bureau are important stakeholders in deciding education policy suggests how amenable to special interests he has become. Certainly, farmers and realtors (whose sales of homes are affected by property taxes) are affected by taxes, but so is every other group in the state. Meanwhile, who is there to consider the impact of any plan on public education?

“It’s a bit ironic that the governor’s choosing not to use the person the people elected to run the schools as someone who might be helpful in addressing these issues,” says John Kraus, spokesperson for State Superintendent of Public Instruction Elizabeth Burmaster.

Kraus accuses McCallum of using meetings with a “secret handshake” to formulate public policy. “The superintendent is going to do what others have chosen not to do, which is to go around the state and solicit public opinion,” Kraus adds. “I think our approach is more responsible to the citizens of Wisconsin.”

The revenue cap on the schools, coupled with the state’s two-third commitment to school funding, was one of Thompson’s major policy reforms, and enjoyed bipartisan support by legislators who were tired of providing school funds targeted for “property tax relief,” only to see the schools spend more and raise property taxes anyway. The unraveling of this policy would be a radical change in state government. Isn’t this important enough to be discussed in public?

Bucks for the Bucks

The Milwaukee Journal Sentinel managed to write two huge front-page stories about the proposed renovation of the Bradley Center without ever disclosing that the entire plan has been hatched to provide more revenue for the Milwaukee Bucks. It’s reminiscent of the outrageously unbalanced coverage of the Brewers bid for a new stadium. The newspaper, of course, gains readers and revenue from its sports coverage, which might explain the bias.

So, as a public service, here is what was missing from the story:
-The 13-year-old Bradley Center has never lost money and does not need repairs or renovation, despite Bradley board member Ulice Payne‘s claim that without the renovation, the building would “basically go to waste.” The building works fine for a wide range of entertainment and sports events and for every one of its tenants except the Milwaukee Bucks, who are demanding club seats and other amenities that would generate more revenue. The team wants to gain $10-$12 million more in annual revenue, which would make it more competitive with other pro basketball teams.

-The Bradley Center has no way to get the $75 million it needs to do the renovation. That’s why it has now gone public with its plan, as a way of putting more pressure on the Wisconsin Center and its board chair Frank Gimbel. Gimbel will not agree to use his center’s taxing authority (including the hotel, motel and car rental tax) to bail out the Bradley Center, unless the latter comes under the wing of the Wisconsin Center. Since the Bradley Center won’t agree to this, it cannot get the $40 million or so in tax money it wants from the Wisconsin Center.

-The Bradley Center also hopes to gain $25 to $50 million in private donations for the project, but did not offer the name of a single donor. It remains to be seen how many wealthy people will donate money to help a private business, the Bucks, become more profitable. Herb Kohl bought the team in 1985 for $19 million, and the team is now estimated to be worth $131 million. A major increase in annual revenue for the team would up its value even more for Kohl, whose wealth is estimated to exceed $300 million. Will the donors share in any pay-off Kohl gets from the team?

-The fact that the Bradley Center went public with its plan suggests the private talks between Gimbel and Payne have gone nowhere. The Bradley Center has gone public in hopes of building support for its plan, but it is trying to make its case without explaining the real purpose of the renovation. That won’t be easy.

-It seems clear Mayor John Norquist has become enamored of the plan to build a professional soccer stadium north of the Bradley Center, a plan the Bradley board rejected. The group pushing this plan claims they would generate $5 million in annual revenue for the Bradley Center. Perhaps, but the details of their plan still seem awfully vague.

-It’s a safe bet Kohl objects to any plan that brings the Bradley Center under the control of the more public Wisconsin Center, which is an unusual position for an elected public official to take. If Kohl was agreeable, it’s likely the Bradley Center would simply go along with Gimbel and forge a compromise.

The MJS solution to this stalemate, suggested in an editorial, is some kind of summit meeting, whatever that means. Gimbel has been meeting for a year or more with Bradley Center officials, and the talks have gone nowhere. Adding more participants is likely to complicate discussions further, and a public discussion of some kind would run counter to the newspaper’s policy of not letting the citizenry know what’s really going on. So what sort of meeting does that leave?

Short Take

After a national search to find a new president of the Bradley Foundation, its chairman Allen Taylor simply walked down the hall and tapped his old Foley & Lardner law partner, Michael Grebe. The decision shows the law firm’s continued impact on the foundation. The Bradley Foundation was created after the old Allen Bradley Company was sold, in defiance of the company’s founders, who had done everything to keep the company private. Foley & Lardner took its lumps in a 1985 Wall Street Journal story that detailed how the city’s most powerful law firm helped “betray” the city, as some saw it, by facilitating the company’s sale.

There has always been a Foley lawyer on the Bradley Foundation board, and now its chairman and president are from the firm. The good news is that Grebe, as a Milwaukeean, may have more commitment to local causes. Under the leadership of former president Michael Joyce, the portion of Bradley funding going to Wisconsin organizations dropped from 50 percent to 37 percent.

Grebe fits the political slant of the foundation; he is a conservative Republican who was a key strategist for former U.S. Senator Robert Kasten. For Grebe, who had always wanted to run for governor, this is an even better position: emperor of the state’s largest pile of foundation gold. But will Grebe turn out to be a short-term choice? He is 61, and may want to start taking it easier in a few years. If he plans to be as activist a leader as Joyce, he will have to work full-time.

This article was originally published by Milwaukee World.

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